Czech Republic

In Czech Republic the social insurance system covers all employed and self-employed persons. The system is financed by employee contributions of 6.5% of monthly covered earnings and employer contributions of 21.5% of monthly payroll. In case of self-employed persons the contribution is of 28%.

Recently, the government introduced some changes in order to stabilize the country's state-run, pay-as-you-go system. Such changes – which came into effect on January 1, 2010 - include:

  • Gradual raise of the retirement age to 65 for men and for women without children by 2028. Women with children will be able to retire from ages 62 to 65, according to the number of children. Currently, the retirement age is 62 and 2 months for men and from 57 to 61 for women, according to the number of children.
  • Gradual increase in the number of years of covered employment required for an old-age pension from 25 to 35 years by 2019. Additionally, as of 2011 individuals who are five years older than the normal retirement age will be able to retire with 17 years of contributions (increasing by one year each year thereafter until it reaches 20 years by 2014). Currently, men and women aged 65 or older can retire with at least 15 years of covered employment.
  • Increase the maximum annual earnings for contribution calculation purposes for employees and employers from 48 to 72 times the national average monthly wage. For 2010, the maximum annual earnings is CZK1,707,048 (approximately US$93,500).
  • Expansion of the definition of disability to include persons aged 38 or older which have been in a covered employment for 10 of the last 20 years before the onset disability. For those younger than 38, less years of covered employment are required.

Article with courtesy of Social Security Online


Sources: Social Security Programs Throughout the World: Europe: 2008; "Convergence Programme of the Czech Republic," Ministry of Finance of the Czech Republic, November 2008; IBIS Compliance Alert, Czech Republic, November 30, 2009; "Zmeny v Duchodovem Pojisteni," Ceska Sprava Socialniho Zabezpeceni, December 2009; "Co Se Zmeni Duchodovem Pojisteni od 1.1.2010," Ceska Sprava Socialniho Zabezpeceni, December 11, 2009.

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